DairyCo

Weekly Feed Market Commentary

Published 12 June 13

Grains

UK feed wheat futures fell over the week (Tue-Tue); the contract for Nov-13 delivery settled down 3.77% to £172.25/t at Tuesday's close. Delivered feed wheat futures (June-13) to East Anglia also decreased by £4.50/t to £181/t (Thu-Thu). A high level of wheat imports prompted by the poor 2012/13 harvest and sluggish demand has meant that end of season stocks are expected to increase year-on-year.

Latest monthly data from Defra shows total wheat milled by flour, starch and bioethanol processors between July and April was 5.49Mt, an increase of  2% on the same period last season. Of this total, home-grown wheat usage reached 4.13Mt, a 5% decline on the 4.35Mt used from Jul-Apr last season.

Chicago (CBOT) wheat (Dec-13) also fell 1.67% over the week to $264.34/t. Drier weather forecast in the US is likely to assist spring wheat development while favourable conditions in Australia and the Black Sea region are weighing on markets. CBOT maize (Dec-13) was also down marginally on the week to $216.83/t as worries over delayed maize plantings ease. The latest USDA crop progress report shows maize plantings now 95% complete, just behind the five year average of 98%.

Protein

CBOT soyabeans (Nov-13) have increased marginally over the week to $487.54/t, as worries over US planting delays continue. As at 9 June 71% of the soyabean crop had been planted in the US, significantly lower than the five year average of 84%. The delayed soyabean plantings are as yet not considered as detrimental, as the US farmer - weather permitting - has the ability to catch up with the intended plantings in a matter of days. In addition, there is also question over whether the remaining maize acreage could be diverted to soyabeans due to the late season.

The increase in price is also limited by the expected surge in supplies in the coming months. The Brazilian supply agency Conab expects the 2012/13
crop at a record 81.3Mt- down from a previous estimate of 81.5Mt. With the Argentine harvest now 98% complete and a large soyabean harvest expected from the US, the longer term soyabean outlook is potentially bearish. Hi-Pro soya meal (Ex-store East Coast, Aug-13) was down £5/t on the week to £377/t in a survey by AHDB/HGCA.